02/02/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

          HB 184-REFUND OF FISH BUSINESS TAX TO MUNIS                                                                       
                                                                                                                                
9:45:09 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ announced  that the final order of  business would be                                                               
HOUSE  BILL NO.  184,  "An Act  relating to  the  sharing of  tax                                                               
revenue  from the  fisheries business  tax  and fishery  resource                                                               
landing tax  with municipalities; and providing  for an effective                                                               
date."                                                                                                                          
                                                                                                                                
9:46:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON, Alaska State Legislature,  deferred to                                                               
Mr.  Cottongim  to  explain  the   information  he  provided  per                                                               
Representative Austerman's request.                                                                                             
                                                                                                                                
9:47:02 AM                                                                                                                    
                                                                                                                                
TIM COTTONGIM,  Fish Group Manager, Juneau  Office, Tax Division,                                                               
Department  of   Revenue,  per  the  request   of  Representative                                                               
Austerman, provided the committee  with a spreadsheet that breaks                                                               
out the  impact of  solely the  export provision  to each  of the                                                               
communities  previously  receiving  sharing  from  the  fisheries                                                               
business tax.   The export  provision provides that  revenues are                                                               
shared back to communities from  where the fish was first landed,                                                               
prior to being exported from the state.                                                                                         
                                                                                                                                
9:48:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN  remarked that this  spreadsheet relates                                                               
the results  of the  50:50 split  versus the  75:25 split  of the                                                               
community and  the state.   Currently, the fisheries  landing tax                                                               
is  split  50:50 between  the  communities  and  the state.    If                                                               
another 25  percent is given  to the municipalities,  then that's                                                               
25  percent less  that goes  to  the state.   The  aforementioned                                                               
would  fuel  the  House  Finance   Committee  argument  that  the                                                               
fisheries don't  pay their way.   If the legislation  reaches the                                                               
House Finance  Committee with  the additional  25 percent  of the                                                               
fisheries  landing  tax  going   to  municipalities,  it  may  be                                                               
something the  House Finance  Committee doesn't want  to do.   He                                                               
acknowledged  that the  sponsor has  said she  will withdraw  the                                                               
legislation  if the  25 percent  increase  to the  municipalities                                                               
doesn't  remain  in  the   legislation.    Still,  Representative                                                               
Austerman  opined  that the  legislation  should  be reviewed  in                                                               
regard  to how  the distribution  of  taxes would  flow from  the                                                               
smaller  communities  to  the larger  communities  based  on  not                                                               
having the  25 percent.   The original legislation, prior  to the                                                               
inclusion of  the 25 percent  increase, had problems  that should                                                               
be reviewed.                                                                                                                    
                                                                                                                                
9:50:41 AM                                                                                                                    
                                                                                                                                
CHAIR  MUNOZ  pointed  out that  the  legislation  addresses  two                                                               
taxes:   the fisheries  business tax  and the  fisheries resource                                                               
landing tax.   The table  prepared by Mr. Cottongim  assumes that                                                               
one of the taxes was removed from the formula.                                                                                  
                                                                                                                                
MR. COTTONGIM  replied yes, the  table doesn't address  the piece                                                               
dealing  with the  exported unprocessed  shares.   Therefore, the                                                               
table didn't calculate the 75 percent  at all, rather it took the                                                               
current 50  percent share that's in  law and changed it  based on                                                               
the exported unprocessed being shared  directly by DOR instead of                                                               
it going to DCCED to allocate.                                                                                                  
                                                                                                                                
CHAIR  MUNOZ related  her understanding  that if  the legislation                                                               
moves forward  as currently  written and  isn't changed  to amend                                                               
either  of the  taxes,  the  return to  the  communities is  much                                                               
greater.   In fact, in most  cases, there would be  a substantial                                                               
increase in revenue.                                                                                                            
                                                                                                                                
MS.  COTTONGIM replied  yes, adding  that he  didn't believe  any                                                               
community would experience  a loss at the 75  percent share along                                                               
with this provision.                                                                                                            
                                                                                                                                
9:52:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  reminded the  committee that  when the                                                               
state  received  50 percent  of  the  tax,  the state  owned  the                                                               
harbors.  However, now most  of the harbors have been transferred                                                               
to  local municipalities  and haven't  been given  money to  help                                                               
maintain the  harbors.  Although  [the additional  funds provided                                                               
via HB  184] won't address  all the  harbor needs, it  will help.                                                               
If the legislation  is changed, that is the  taxes are decoupled,                                                               
she announced that she would withdraw the legislation.                                                                          
                                                                                                                                
9:53:54 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ announced that HB 184 would be held over.